ETFGI’s monthly Global ETF and ETP industry insights.
The 10 year compounded annual growth rate (CAGR) of global ETF and ETP assets at the end of 2012 was 29.6%. There are currently 4,731 ETFs and ETPs with 9,710 listings, assets of $1.95 trillion, from 208 providers on 56 exchanges.
iShares is the largest ETF/ETP provider in terms of assets with $760 billion, reflecting 39.0% market share; SPDR ETFs is second with $337 billion and 17.3% market share, followed by Vanguard with $246 billion and 12.6% market share. These top three ETF/ETP providers, out of 208, account for $1.34 billion or 68.9% of global ETF/ETP assets, while the remaining 205 providers each have less than 4% market share.
The top 3 providers of ETFs/ETPs accounted for $179.5 billion, or 67.6%, of all net new assets gathered in 2012. iShares gathered the largest net new ETF and ETP inflows in 2012 with $87 billion, followed by Vanguard with $54.2 billion and SPDR ETFs with $38.3 billion net inflows. All three gathered significantly more net new assets in 2012 than in 2011.
At $265.3 billion, 2012 net inflows into ETFs and ETPs listed globally represented an increase of 55.9% on the $170.1 billion net inflows gathered during 2011 but fell $7 billion short of breaking the record level of net new assets set in 2008. Equity ETFs and ETPs gathered the largest net inflows, accounting for $167.3 billion, followed by fixed income ETFs and ETPs with $62.9 billion and commodity ETFs and ETPs capturing $23.1 billion. Overall, $37.8 billion of net new money went into ETFs and ETPs in the month of December.
“The uncertain and challenging market conditions investors have faced during 2012 and over the past few years, combined with the difficulty in finding active managers that consistently deliver alpha, have caused more institutional investors, financial advisors and retail investors to embrace the use of ETFs and ETPs for strategic and tactical asset allocations. ETFs provide greater transparency in relation to costs, portfolio holdings, price, liquidity, product structure, risk and return compared to many other investment products and mutual funds” according to Deborah Fuhr, Managing Partner at ETFGI.
Equity focused ETFs and ETPs have gathered $167.3 billion, an increase of 84.5%, or $76.6 billion, on 2011 net new assets. Products providing exposure to US/North American equities have been the most popular receiving $78.3 billion, followed by emerging market equities with $54.3 billion.
Fixed Income ETFs and ETPs have proven to be popular tools this year with $62.9 billion in net new assets, an increase of $17.5 billion, or 38.5%, on 2011 levels. Corporate bond products have gathered the largest net inflows with $24.7 billion, followed by high yield with $14.7 billion.
Commodity flows at $23.1 billion are 52.4% higher than 2011 net inflows of $15.1 billion. Precious metals have been the most popular gathering $20.3 billion, while agriculture experienced the largest net outflows with $1.5 billion.
Indices and their methodology are a key factor in selecting and using ETFs and ETPs and there are over 100 firms providing indices. The top 3 index providers account for 37.4% (1,770) of all products with assets of $1.1 trillion, or 54.8%, of all assets.
S&P Dow Jones is the leading index provider for ETFs and ETPs in terms of both number of products and the amount of assets tracking its benchmarks, with 1,103 products holding a combined total of $481.9 billion in assets and collectively capturing $59.9 billion, or 22.6%, of 2012 net new assets. MSCI ranks second with 572 ETFs and ETPs tracking its indices, holding $405.4 billion in assets and gathering $56.9 billion of net new assets. Barclays Capital ranks third with $180.7 billion or 9.3% of the assets in 185 products, reflecting the growth in the use of ETFs and ETPs for fixed income exposure.
Note to editors
ETFs are typically open-ended, index-based funds, with active ETFs accounting for less than 1% market share. They can be bought and sold like ordinary shares on a stock exchange and offer a broad exposure across developed, emerging and frontier markets, equities, fixed income and commodities. ETFs are used widely by institutional and increasingly by financial advisors and retail investors to:
- equitize cash
- implement diversified exposure to a market
- comprise a core or satellite investment
- be a long term strategic investment
- implement tactical adjustments to portfolios
- use as building blocks to create entire portfolios
- allow investors to hedge the market
- use as an alternative to futures and other derivative products
Exchange Traded Products (ETPs) are products that have similarities to ETFs in the way they trade and settle but they do not use an open-end fund structure. The use of other structures including unsecured debt, grantor trusts, partnerships, and commodity pools by ETPs can, in addition to a significantly different risk profile, create different tax and regulatory implications for investors when compared to ETFs which are funds.
Established by industry expert Deborah Fuhr and partners, ETFGI is a wholly independent research and consultancy firm providing services to leading global institutional and professional investors, the global exchange traded fund and exchange traded product industry, its Regulators, its advisers and its investors.
ETFGI produces extensive ETF-specific analysis covering over 4,700 ETFs and ETPs, across 9,500 exchange listings from over 200 providers on 50 stock exchanges.
ETFGI leverages extensive industry experience, unparalleled industry contacts and rigorous analysis to deliver proprietary research on the global ETF and ETP industry.
ETFGI offer a full range of consulting services covering the spectrum of the exchange traded exposure universe from data and analytics to assistance in understanding product structures, due diligence on products and service providers, from distribution and capital market challenges to governance and the regulatory environment. ETFGI provide services to both new and experienced institutional and professional investors interested in using and comparing ETFs and ETPs and better understanding the industry, product, regulatory and company specific data points.
ETFGI will soon be offering an annual paid subscription service which will provide: 1) the monthly ETFGI Global ETF and ETP Industry Insight report, which will provide a detailed analysis of the Global ETF and ETP industry, analysing net new asset flows into asset classes, products and managers, index provider rankings, broker rankings and new product launches, as well as numerous other metrics; 2) a directory of ETFs and ETPs; and 3) access to tools via the soon-to-be launched website www.etfgi.com that will allow investors to search for and compare the nearly 5,000 ETFs and ETPs which have almost 10,000 listings from over 200 providers on 54 exchanges. Investors can subscribe for a country or regional view of the ETF and ETP database if that better suits their investment or research requirements.
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